Tuesday, June 12, 2012

Insuring against dry days in Africa

IRIN: Soaring temperatures and the severity of this year’s drought have taken some by surprise in southeastern and eastern Mauritania. When rains are normal people only dip into their cereal reserves from June/July in the following year, but in mid-2012 people have already been without food for more than three months, and many pastoralists in the region have lost the animals on which they depend for a living.

Livestock farming is the second biggest export earner so the loss extends to the national purse.

Mauritania is poor - among the bottom 30 in the UN Human Development index - and recently asked for US$95 million to help respond to the crisis. But if it had signed up for a pooled drought risk insurance facility, it could have had up to $30 million to help respond within weeks after the weak rainy season ended in October 2011, said the World Food Programme (WFP).

In any given year a thin rainy season in Mauritania is probable, but this cannot be predicted with certainty says WFP, which is helping the African Union (AU) set up the Africa Risk Capacity (ARC) insurance and early response facility. The objective is that the insurance will pay out when an extreme event occurs - in this case drought - rather than in the case of persistent or localized arid events that occur often or even every year.

By linking insurance payouts to effective response plans, ARC aims to help African governments reduce the negative impact of droughts on the lives and livelihoods of the vulnerable, while decreasing reliance on external aid. "We are still in the design phase, and if all goes well we hope to establish the ARC in mid-2013 or so," said Joanna Syroka, programme director of the project...

The Sahara Desert in Mauritania, shot by Annabel Symington, Wikimedia Commons via Flickr, under the Creative Commons Attribution 2.0 Generic license

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